KeyCorp said it will make several changes to its board Wednesday, roughly six weeks after an activist investor criticized its performance and called for CEO Chris Gorman’s firing.
KeyCorp appointed Dollar General CEO Todd Vasos as the bank’s lead independent director and said directors Carlton Highsmith and Ruth Ann Gillis will retire at the bank’s annual meeting on May 14.
Vasos succeeds Alexander M. “Sandy” Cutler, who as lead independent director for 10 years and board member since 2000, helped KeyCorp navigate “periods of significant industry change,” according to Gorman.
Vasos joined KeyCorp as a director in 2020. Cutler will continue to serve as an independent director.
Last month, activist investor HoldCo Asset Management, which took a $140 million stake in KeyCorp, alleged that Cutler “has overseen tremendous underperformance over the past 25 years and has watched the dilution tax play out again and again and again.”
HoldCo also asserted that “every single director” at KeyCorp “has objectively failed their constituents.”
To replace Highsmith and Gillis, KeyCorp has nominated BlackRock veteran Antonio DeSpirito and Truist vet Christopher Henson.
“Tony and Chris are outstanding additions whose experience and capabilities are directly aligned with KeyCorp's priorities,” Gorman said in a prepared statement. “They bring expertise across capital markets, banking operations and financial oversight, as well as track records of value creation.”
DeSpirito served as BlackRock’s global chief investment officer for fundamental equities. Henson retired from Truist in 2021 as head of banking and insurance. He previously served as president, chief operating officer and CFO of the North Carolina-based lender’s predecessor, BB&T.
The nominees will support the bank in its pursuit to “execute its strategy to drive disciplined growth, enhanced profitability and shareholder value,” Gorman added.
A KeyCorp spokesperson did not respond to an inquiry into whether the changes were a direct response to HoldCo’s December presentation.
“[T]his reaffirms the Board’s commitment to strong corporate governance and long-term shareholder value creation,” the spokesperson said, echoing words from the press release.
HoldCo also declined to comment on the changes.
The activist investor has been persistent in efforts to shake up the banking sector of late. The Fort Lauderdale, Florida-based firm urged Comerica last July to sell. When the Texas lender said it would be acquired by Fifth Third in October, HoldCo took issue with the deal and sued both Comerica and Fifth Third. That deal nabbed its final regulatory approval last week.
